BUTTER MARKETING

New Zealand Herald, Volume LXXII, Issue 22027, 6 February 1935, Page 7

BUTTER MARKETING

RESTRICTING EXPORTS

EFFECT UPON PRICE

The view that t!ie price decline in butter and cheese over recent years is due to largely increaised supplies is disputed in a bulletin prepared by the Department of Economics of Canterbury College for the Canterbury Chamber of Commerce. Over the fiveyear period since J. 529 the output of butter in New Zealand increased bv 60 per cent and that of cheese by 20 per cent, while the index number of dairy produce prices fell from 146 in 1929 to 74 in February, 1934, and 84 in September, 1934. the bulletin states. However, in the us,me period heavy falls in prices occurred in all exported pastoral products, whether supplies increased or not. "The difficulties oi ! the dairy industry are not due solely to factors such as over-production, poor quality and inefficient marketing, but they are due first to the depression, which has caused a general fall in prices," the report continues. "Other reasons are nationalism and protection in Europe, leading to the closing of alternative markets, the increase in supply to the British market, especially from New Zealand and Australia., and the present uncertainty about the continuance of free entry for New Zealand dairy produce into the British market. Although the quality of New Zealand produce and the methods of marketing are probably still capable of improvement they cannot be regarded an caftses of the fall in prices. The quality of the butter at least has improved and marketing methods adopted have succeeded in penetrating new market areas and securing the absorption of greatly increased supplies. "The great increase in the supply of butter has be*n absorbed by increased consumption, partly at the expense of margarine, the output of which decreased by 70,000 tons, while butter imports increased by 150,000 tons. It should not be forgotten that a restriction of supply aimed to raise prices might readily reduce demand and lead to increasing consumption of margarine, and that, a very heavy reduction of the but rer suppi.y might bo required to raise prices appreciably." Discussing restriction on exports the bulletin states that there were few cases where such a, policy had been of advantage to exporters. As Australia was reported to be definitely opposed to restriction of exports in any form New Zealand s best policy might well be to unite with Australia and other Dominions in a concerted effort to secure continuance of a free market for Empire product in Britain.